Bundesbank president-designate Mr Axel Weber yesterday painted himself as a policy pragmatist not afraid to be a modernising force, both at home and in the European Central Bank's (ECB's) Governing Council.

He also made clear that he won't be taking orders from Berlin, slipping smoothly into the role of a top central banker by warning governments to maintain fiscal discipline and stressing he was politically independent.

The government yesterday nominated Mr Weber, an economics professor who used to run a central bank think-tank in Frankfurt, to replace Mr Ernst Welteke, who resigned in an ethics scandal last week.

German finance minister Mr Hans Eichel said Mr Weber stood for "continuity in monetary policy" and expressed hope a quick succession would end the "negative headlines" surrounding the Bundesbank because of the Welteke affair.

Speaking at a joint news conference with Mr Eichel, Mr Weber chose his words carefully when asked about current policy issues, often citing opinions issued by the government's five-man council of economic advisers, which he joined in 2002.

He said he saw no grounds to change the council's view last November that the ECB's key interest rate at 2 per cent was appropriate and declined to comment on the Bundesbank's plans to sell part of its gold reserves.

But he signalled a hands-off approach to exchange rates, said Europe's fiscal rulebook - the Stability and Growth Pact - should be respected and hinted he would favour further review of the ECB's monetary policy strategy.

He also said that the Bundesbank, Europe's dominant central bank until the ECB took over the region's monetary reins in 1999, needed to slim down further and the country's splintered banking industry should take an open approach to restructuring. - (Reuters)